LONDON (Reuters) -Global education group Pearson said it would launch a 350 million pound ($470 million) share buyback after demand for assessment and qualification services enabled it to hit 2021 targets and set out medium-term growth goals.
The British company, which has been fighting to stabilise the business since digital sales and second hand offers wiped out its traditional textbook model in 2015, posted 2021 adjusted operating profit in line with recently upgraded forecasts and said it saw stable growth ahead.
It added: “We expect the group to achieve mid-single digit revenue CAGR from 2022 to 2025 and for margins to remain relatively stable in the near term, as we invest to drive growth, improving by 2025 to mid-teens.”
The British company reported 2021 profit of 385 million pounds ($516 million), and said it saw further revenue growth in 2022 and profit in line with current market expectations of 416 million pounds.
The British company has endured a turbulent pandemic, lifted by demand for online learning services, hit by cancelled exams and stymied late last year when Omicron and a tight U.S. labour market deterred students from enrolling at community colleges.
Under the leadership of former Disney executive Andy Bird it has sought to broaden its approach beyond traditional education outlets, selling directly to consumers via its Pearson+ app and to businesses looking to train staff.
Its assessment and qualifications division posted 2021 underlying sales growth of 18%, with virtual learning up 11% and English language learning up 17%.
Its higher education division, often the source of profit warnings, posted underlying sales down 5%, with growth in Canadian and UK Courseware offset by a 6% decline in US Higher Education Courseware. It said it expected the division’s revenue to decline in 2022 but by less than last year.
($1 = 0.7455 pounds)
(Reporting by Kate Holton; Editing by Alistair Smout)
